Which of the Following Statements About Floating Rate Preferred Stock

question 85

Multiple Choice

Which of the following statements about floating rate preferred stock is true?

• A) The dividend rate changes quarterly.
• B) The price of the stock will fluctuate with the market.
• C) The dividend rate is tied to the inflation rate.
• D) More than one of the above are true.

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Definitions:

Foreign Securities

Investment instruments issued in a jurisdiction outside of the investor's country, including stocks, bonds, and other financial assets.

Negative Beta Value

Indicates an investment's return moves opposite to the market's return, suggesting a potential risk-reducing benefit in a diversified portfolio.

Risk-Reducing Property

A characteristic of investment diversification that helps in lowering the overall risk of a portfolio.

Theoretical

Based on or involving theory; not practical or applied, but focused on understanding and explaining phenomena.